OpenAI said on Wednesday that Chinese AI startup DeepSeek's open-source models may have "inappropriately" based its work on the output of OpenAI's models, an OpenAI spokesperson told Axios. Why it matters: China's DeepSeek has taken the AI industry by storm with its R1 reasoning model that competes with OpenAI's o1,

DeepSeek built top-performing AI models using less-advanced chips at what it says is a fraction of the cost of rivals such as OpenAI.

It’s impossible to look at the Chinese artificial intelligence startup DeepSeek’s new AI model without comparing it against OpenAI, the dominant American rival.